Advising bank什麼意思
"Advising bank" is a term used in international banking and trade finance. It refers to a bank that acts on behalf of a foreign bank to notify a recipient of a letter of credit (LC) or to confirm the authenticity of the LC.
In the context of a letter of credit, which is a document issued by a bank on behalf of an importer that guarantees payment to the exporter upon the delivery of goods and compliance with the terms of the LC, the advising bank plays a crucial role. Here's how it works:
- Issuing Bank: The bank that issues the letter of credit at the request of the importer (buyer).
- Advising Bank: The bank in the exporter's country that receives the LC from the issuing bank and forwards it to the exporter as a confirmation of the LC's authenticity. The advising bank does not guarantee payment; it simply notifies the exporter that the LC is valid and has been issued.
- Confirming Bank (if applicable): A confirming bank adds its confirmation to the LC, guaranteeing payment to the exporter if all the terms of the LC are met. This is an optional service and not all LCs have a confirming bank.
- Negotiating Bank (if applicable): The bank that negotiates the LC with the exporter by advancing funds against the documents.
The advising bank's role is to ensure that the LC is authentic and has been issued according to the rules of the International Chamber of Commerce's Uniform Customs and Practice for Documentary Credits (UCP). The advising bank does not take any risks or make any payments; it simply advises the exporter of the LC's existence and terms.
In summary, an advising bank is a bank that advises an exporter of a letter of credit issued in favor of the exporter by a foreign bank. The advising bank confirms the authenticity of the LC but does not guarantee payment.